When Amazon announced an agreement last year with Apple to sell Apple products directly on its website, it seemed like a big win for consumers, because it raised a problem around counterfeit foods. However, according to a report by The Verge, the deal may not be entirely legal.
Apparently, the agreement between Amazon and Apple also meant kicking some legitimate dealers off of Amazon's Marketplace platform. The FTC is now investigating the antitrust law breach agreement.
In a speech with Sally Hubbard, an antitrust attorney, The Verge report explains the case at hand:
You are not allowed to agree with another company to put a floor on your prices, she says. When you have these brands and a dominant retailer like Amazon, and Amazon says: We're going to make sure that everyone who sells under your chips can't get authorization to sell on your platform anymore, it's basically a pricing deal between a dominant retailer and a brand. And it is illegal under section 1of the Sherman Antitrust Act.
The Verges report cites a reseller, John Bumstead, who was forced out of the Marketplace program as a result of the deal. Since then, Bumstead has been contacted by FTC officials about how the Amazon-Apple deal has affected his business.
Apple is currently involved in several different antitrust investigations, including a lawsuit from developers against Apple's "profit-kill" practices related to the App Store.